Spain media giant Prisa announces TV merger plan

Shares in Spanish media giant Prisa, owner of leading daily El Pais, closed sharply higher on Friday after it announced plans to merge its television operations with rival Imagina within a month.

Madrid - Shares in Spanish media giant Prisa, owner of leading daily El Pais, closed sharply higher on Friday after it announced plans to merge its television operations with rival Imagina within a month.

The stock closed up at 17.65 percent at a session high of four euros, bringing gains during the week to over 40 percent.

"Prisa and Imagina have agreed to give themselves a month to sign a merger deal with the aim of joining up their audiovisual activities in a newly-created company," Prisa said in a statement.

The government in February passed a law that eliminated a 5.0 percent limit on cross shareholdings at television broadcasters.

The law is intended to ease sector mergers at a time when Spain's media is being hammered by the country's worst recession in over five decades, with advertising revenues dropping sharply.

Prisa and Imagina's parent company Mediapro also announced that they had reached a deal on sharing broadcasting rights of top Spanish football matches for the next three seasons, ending a bitter dispute.

La Sexta and Prisa's pay-TV unit Digital+ have shared the broadcast rights for the first division and Spanish Cup but have clashed over which matches should be shown on which channel and at what time.

Aside from El Pais, Prisa also owns business paper Cinco Dias, sports daily AS, as well as several radio stations in Spain and extensive interests in Latin America.

Last year, the group invited offers for Digital+ but has failed to find a buyer.